Here’s how NFL will embrace and cash in on sports gambling after losing in Supreme Court

In 2016, when the NFL’s stance of refusing to place a franchise in Las Vegas began to wobble, former Oakland Raiders CEO Amy Trask began repeatedly framing the change in one word.

Antiquated.

For anyone who listened, Trask kept the message on a singular point: The NFL’s playbook on protecting the game against gambling was outdated. In one significant way, the league’s marriage to the gambling world had already been established without consent – coupled through the Internet, inside smart phones and in the grasp of technological ingenuity that had brushed aside the NFL’s reticence.

Trask was absolutely correct. And two years later – with the Las Vegas Raiders on the horizon and a Supreme Court decision that allows states to legalize sports betting – the NFL is now neck-deep in sports gaming. And over the long run, that’s going to be a titanic financial windfall for the NFL, despite fading protests that have roots in the league’s antiquated thinking on the gambling issue.

The league’s vehement anti-gambling stance took a hit when the NFL approved the Raiders’ plan to move to Las Vegas. (AP)

Expect NFL to be ready to cash in

To put a fine point on Monday’s developments for the NFL: the league isn’t invading Las Vegas anymore. It turns out that Las Vegas is invading the league, from New York to Los Angeles to Des Moines, Iowa. Wherever an NFL game is being played, chances are you’ll be able to put some type of wager on it very soon. Now it’s up to the league to not only embrace that reality, but also monetize it.

Does the NFL want a strict framework of rules for sports gambling? Maybe.

Does it want regulatory mechanisms in place to keep unseemly characters from crawling under the foundations of its game? Probably.

But more than anything, does the NFL want to be sure it gets a piece of all the legal gambling action on its game, regardless of whether a state houses an NFL franchise? An educated guess is that in the long-term, the answer will be absolutely. And the best way to get a piece of all the action (even in Twin Falls, Idaho), is to start lobbying for some type of nebulous regulation from Day 1. That’s precisely what the NFL did Monday.

More gambling, more eyeballs

Make no mistake, the NFL isn’t being caught flat-footed here. Its owners already had a gambling-specific discussion and presentation at the Orlando meetings in March, largely focused on the potential of Monday’s landmark Supreme Court decision. But the NFL’s homework started long before that meeting. Indeed, the NFL’s power brokers have been thinking for quite some time about the changing attitudes toward gambling and what they could mean for the billions on the bottom line.

You could see it in the fairly breezy 2017 relocation approval of the Raiders to Las Vegas. An approval which had the votes of the Los Angeles Rams, Tampa Bay Buccaneers and Jacksonville Jaguars – three ownership groups that also have significant stakes in English Premier League franchises, which all fall under an umbrella of legalized gambling overseas. And lest anyone forget, the starburst of daily fantasy sports gambling over the past five years included the rise of DraftKings, which has two eyebrow-raising investors in Dallas Cowboys owner Jerry Jones and New England Patriots owner Robert Kraft.

All of which confirms what we already know about the NFL. Its thinking may be antiquated in many respects but it’s also remarkably fluid when it comes to massive sums of new money. And with the league targeting $25 billion in annual revenues by 2027, it is aggressively on the lookout for new ways to monetize the product.

Monday’s decision will offer plenty. Not just through a traditional cut of gambling profits, which is sure to be sought by the NFL. There will be other streams of cash, too. Whether it’s through higher television ratings from coast to coast, new waves of advertising partners, or more complex and lucrative deals with media partners, the equation laid out is fairly simple. A wider national gambling platform means more eyeballs. More eyeballs means more customers. And more customers means the same thing it has always meant: A bloated cash register.

The secondary ticket market has been a relatively new source of income for the NFL. (AP)

Ticket scalpers taught NFL valuable lesson

How the NFL gets to that windfall remains to be seen. As owners indicated at the Orlando meetings, a Supreme Court decision kicking the door open on gambling would be just the first step in a long process of monetization. One in which there will be a massive string of planning, meetings and regulatory debates. Not to mention the ramping up of a security infrastructure that protects NFL franchises from an explosion of gambling, which is sure to draw in some questionable characters along the way.

But this also wouldn’t be the first time the NFL learned to embrace something it once considered the underbelly of its product. Fans only need to look as far as ticket scalping to understand how quickly the league can turn what it deemed a negative into a net-positive for its bank account.

It wasn’t that long ago when the NFL griped incessantly about the secondary ticket market that made massive sums of cash off tickets the league had already sold to fans. But after years of wondering how to tackle the sellers who had created a massive underground economy off of the league’s product, the NFL decided to join in and double-dip on its own ticket sales.

Rather than chase around scalpers through local law enforcement or in the court system – which was expensive and ineffective – the NFL simply cut deals with large ticket brokers. And then it went out and formed an even deeper partnership with TicketMaster, launching an NFL ticket exchange that gave the league a second cut of profits and teams an opportunity to track the product it was selling to season-ticket holders.

Just like that, the NFL took a negative and spun it into a positive. It gained more power over its product, gained more money on the bottom line, and coopted a new business frontier by embracing the technological ingenuity of someone else.

Few business empires are more capable of pulling off such a financial bonanza with its product. Even fewer are capable of repeating it. The NFL can do both. And starting with Monday’s push into the deep end of the gambling pool, it will.